WGU D089 ECONOMICS
Which term describes the average price of goods and services most
commonly purchased in the United States?
Consumer price index
Shoe leather costs
Purchasing power
Hyperinflation - ANSWERS-Consumer price index
Correct! This is the average price of the goods and services mostly
commonly purchased in the United States.
What is the highest weighted factor in the consumer price index
(CPI)?
Food
Housing
Medical care
Education - ANSWERS-Housing
Correct! Housing is the highest weighted factor in the CPI.
Individuals living in a country experiencing hyperinflation are
spending much of their time traveling back and forth to the bank so
they can hold less cash to battle the effects of inflation.
,Which term describes what this group is experiencing?
Shoe leather costs
Menu cost
Substitution cost - ANSWERS-Shoe leather costs
Cost of living adjustments
Correct! This is the total cost in dollars and time that people spend
trying to avoid the negative effects of inflation. This is often managed
by traveling back and forth to the bank.
Retail stores operating in a country with high inflation experience
added costs and must keep changing their prices to account for the
effects of inflation.
Which factor is being managed by these retail stores?
Quality goods bias
Menu costs
Substitution bias
Shoe leather costs - ANSWERS-Menu costs
Correct! This is the cost firms pay because they must keep changing
their prices to reflect inflation's impact.
An employer has agreed to give a 3% pay raise to all employees
because inflation for the past year was 3%.
What is the term used for this type of pay raise?
,Disposable income
Cost of living adjustment
Hyperinflation
Shoe leather costs
. - ANSWERS-Cost of living adjustment
Correct! This is an increase in pay sufficient to keep up with inflation
The economists show ABC Company the comparison of gross
domestic production (GDP) between Country A and the company's
home country. Real GDP for Country A is US$9,500,000, and ABC's
home country GDP is US$11,200,000 for the previous year. The
population in Country A is 150 million, and ABC's home country's
population is 225 million.
Why is Country A's standards of living better than ABC Company's
home country?
ABC Company's home country economy is larger on a per capita
basis.
Country A's economy is larger on a per capita basis.
Country A's economy is smaller based on real GDP.
ABC Company's home country economy is smaller based on real
GDP. - ANSWERS-Country A's economy is larger on a per capita
basis.
, Correct! GDP per capita for Country A is US$63,333.33 versus
US$49,777.78 for ABC Company's home country.
Country A $9,500,000/150 million=$63,333.33
Country ABC $11,200,000/225 million=$49,777.78
Per capita GDP=GDP/population
What is the labor force participation rate for Country A?
Country A ABC's Home Country
Total adult population 120 million 200 million
In the labor force 72 million 124million
Employed 67.5 million 115.3 million
Unemployed 4.5 million 8.7 million
94%
60%
62%
93% - ANSWERS-60% Correct! 60% is the labor force participation
rate for Country A.
In the labor force/Total population
Which term describes the average price of goods and services most
commonly purchased in the United States?
Consumer price index
Shoe leather costs
Purchasing power
Hyperinflation - ANSWERS-Consumer price index
Correct! This is the average price of the goods and services mostly
commonly purchased in the United States.
What is the highest weighted factor in the consumer price index
(CPI)?
Food
Housing
Medical care
Education - ANSWERS-Housing
Correct! Housing is the highest weighted factor in the CPI.
Individuals living in a country experiencing hyperinflation are
spending much of their time traveling back and forth to the bank so
they can hold less cash to battle the effects of inflation.
,Which term describes what this group is experiencing?
Shoe leather costs
Menu cost
Substitution cost - ANSWERS-Shoe leather costs
Cost of living adjustments
Correct! This is the total cost in dollars and time that people spend
trying to avoid the negative effects of inflation. This is often managed
by traveling back and forth to the bank.
Retail stores operating in a country with high inflation experience
added costs and must keep changing their prices to account for the
effects of inflation.
Which factor is being managed by these retail stores?
Quality goods bias
Menu costs
Substitution bias
Shoe leather costs - ANSWERS-Menu costs
Correct! This is the cost firms pay because they must keep changing
their prices to reflect inflation's impact.
An employer has agreed to give a 3% pay raise to all employees
because inflation for the past year was 3%.
What is the term used for this type of pay raise?
,Disposable income
Cost of living adjustment
Hyperinflation
Shoe leather costs
. - ANSWERS-Cost of living adjustment
Correct! This is an increase in pay sufficient to keep up with inflation
The economists show ABC Company the comparison of gross
domestic production (GDP) between Country A and the company's
home country. Real GDP for Country A is US$9,500,000, and ABC's
home country GDP is US$11,200,000 for the previous year. The
population in Country A is 150 million, and ABC's home country's
population is 225 million.
Why is Country A's standards of living better than ABC Company's
home country?
ABC Company's home country economy is larger on a per capita
basis.
Country A's economy is larger on a per capita basis.
Country A's economy is smaller based on real GDP.
ABC Company's home country economy is smaller based on real
GDP. - ANSWERS-Country A's economy is larger on a per capita
basis.
, Correct! GDP per capita for Country A is US$63,333.33 versus
US$49,777.78 for ABC Company's home country.
Country A $9,500,000/150 million=$63,333.33
Country ABC $11,200,000/225 million=$49,777.78
Per capita GDP=GDP/population
What is the labor force participation rate for Country A?
Country A ABC's Home Country
Total adult population 120 million 200 million
In the labor force 72 million 124million
Employed 67.5 million 115.3 million
Unemployed 4.5 million 8.7 million
94%
60%
62%
93% - ANSWERS-60% Correct! 60% is the labor force participation
rate for Country A.
In the labor force/Total population
